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2017 Annual Report

Strength in Numbers

We're uncompromising about our financial strength.

Here's why.

Trust

You Count on us to keep our commitments.

Financial strength goes hand in hand with corporate responsibility. Above all, we are here to pay benefits when people need us most, regardless of economic conditions. That’s why in 2017 — and throughout our more than 160-year history — we’ve done what’s right and honored our promises.

96%Policyowners who stay with Northwestern Mutual year after year.

Financial Strength — Unsurpassed again in 2017

Northwestern Mutual received the highest financial strength ratings awarded to any U.S. insurer.1

Aaa

Highest

Moody's Investors Service

A++

Highest

A. M. Best Company

AAA

Highest

Fitch Ratings

AA+

Second Highest

S&P Global Ratings

1Ratings are for The Northwestern Mutual Life Insurance Company and Northwestern Long Term Care Insurance Company, as of the most recent review and report by each rating agency. Ratings as of: 01/18 (Moody’s Investors Service), 04/17 (A. M. Best Company), 07/17 (Fitch Ratings), 06/17 (S&P Global Ratings). Ratings are subject to change.

#1FORTUNE's 2017 ranking of Northwestern Mutual for "Quality of Products and Services" and "Financial Soundness"

Total Company Assets

Resources available to meet our current and future commitments.

Total Assets2 (In Billions)

2The vast majority of the company’s managed assets back most of its life, disability income and portfolio income annuity liabilities. For more information about our investments and investment strategies, please see Northwestern Mutual’s Annual Investment Report.

Total Surplus3

Funds set aside for the unexpected.

Total Surplus3 (In Billions)

3Includes Asset Valuation Reserves.

In 2017, total assets and surplus each increased 6% over 2016. Our overall financial position remains strong, with a 2017 surplus ratio (total surplus over our insurance reserve liabilities) of 13%, a level that supports our unsurpassed financial strength ratings.

Staying Power

Clients Stay With Us For Decades

The economy experiences ups and downs. Being financially strong means we can weather short-term downturns while staying focused on the long term — right where your future is. Thanks to this approach, we’ve paid policyowners a dividend every year since 1872.

Investment Products

Our distinctive insurance-and-investments planning approach has resulted in the rapid growth of our investment products and services business.4 Investment client assets grew by 25% in 2017, ending the year at more than $125 billion.

Insurance Products

Insurance in force represents the size of a life insurer’s portfolio of business.

Life Insurance in Force (In Trillions)

Life insurance in force has grown steadily, including a 5% increase in 2017 over 2016.

4 millionNumber of people insured by Northwestern Mutual.

Three fourths of a circle with quotes in the center. Northwestern Mutual is #1 in sales of life insurance as of 30 September 2017 ... the Northwestern Mutual brand is extremely well respected in the industry."

— Moody's Investors Services report, January 2018

Performance

We Invest More than $225 Billion For The Benefit of Policyowners Like You.

When we invest, our financial strength is a significant edge, allowing us to take advantage of opportunities as they arise. We’re able to buy and sell investments when the time is right. This results in greater long-term value for you.

In 2017, Northwestern Mutual paid more in life insurance and disability dividends than our top three closest competitors combined.5

5 Based on announced estimates. Actual payouts are not yet known.

Product Value

Operating gain before dividends and taxes (OGBDT) is the primary source of our policyowner dividends.

We aim to maximize our operating gain each year to deliver the highest possible product value.6 Operating gain and policyowner dividends increased 2% and 3% during 2017.

6 While dividends are not guaranteed, Northwestern Mutual has paid dividends every year since 1872.

Operating Gains and Dividends (In Billions)

Three fourths of a circle with quotes in the center. NM is known as a lower-cost competitor in the life insurance industry. Among its mutual rated peers, the company had the lowest unit cost for the 2014−2016 period."

— Fitch Ratings report, 2017

Total Benefits

Total benefits paid to policyowners or beneficiaries.

Policyowner Benefits Paid (In Billions)

Insurance and annuity benefits paid to beneficiaries are among the largest expenditures of the company. Our exceptional financial strength supports our ability to deliver on these promises.

Premium Revenue

New sales and renewed business for insurance and annuity products.

Premium Revenue (In Billions)

Premium revenue is a significant source of our total revenue (which also includes investment income).

Message from the CEO

Three fourths of a circle with quotes in the center.

We recognize that people don’t think every day about the financial strength of our company. That’s why we always think about it."

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company and its subsidiaries. Life and disability insurance, annuities, and life insurance with long-term care benefits are issued by The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM). Long-term care insurance is issued by Northwestern Long Term Care Insurance Company, Milwaukee, WI, (NLTC) a subsidiary of NM. Securities are offered through Northwestern Mutual Investment Services, LLC, (NMIS) a subsidiary of NM, broker-dealer, registered investment adviser, member FINRA and SIPC. Fiduciary and fee-based financial planning services are offered through Northwestern Mutual Wealth Management Company® (NMWMC), Milwaukee, WI, a subsidiary of NM and a federal savings bank. Products and services referenced are offered and sold only by appropriately appointed and licensed entities and financial advisors. Not all products and services are available in all states. Not all Northwestern Mutual representatives are advisors. Only those representatives with the titles "Financial Advisor" or "Wealth Management Advisor" are credentialed as NMWMC representatives to provide advisory services.